Monday, October 15, 2012

Disaster in the Making: The Face of the Equine Market in the USA Changed over the Weekend

Right now there is a lot of panic and white noise regarding the horse market in the USA. People are concerned, not only on how it will affect Wild Horses, but also how horses in the general population will make it through the winter in this economy. Because of fires, drought and the economy there are just too many horses and not enough feed and resources in many places. It is normal for many ranches and farms to lessen the number of stock horses they need to feed through the winter to reduce the financial burden. However there are just not enough buyers at this time.

This all came about on Friday October 12 with the much expected announcement by the European Union (EU) that no longer would horse  meat from the USA be accepted for import. This has been the more seamy side of the horse industry for generations with horse owners, activist and advocates split in the US as to if it should or should not be. This is especially because of the more seamy side of the industry, slaughter for human consumption.  Its not widely accepted in the USA, however eating horse meat is well accepted in some European and Asian countries.

 It was confirmed  through friends in the North West,  last night,that the auction prices have dropped significantly since the October 12th announcement that the market for US horses is completely closed  to” Kill Buyers” in Canada. as the EU has banned the import of horses from the USA. Horses slaughtered from the USA in both Canada and Mexico have been banned because the management of horses here does not meet the minimum EU  health standards for slaughter in those countries. The Bottom has basically dropped out of the market. And low end horses with no  specific in demand training or breeding are worthless on a monetary level. However I was also told that some really nice useful horses were no sales or going for less than $75 a head. Not a good prospect for horses that one has invested thousands of dollars in training and raising. One estimate I was given was that up until this weekend between 4,000 and 5,000 domestic US horses were disappearing over the boarder in any given week.

What was shocking is that at one sale,according to one of my sources, 11 horses went to Mexico for $200 total and no one stepped up to the plate to rescue them. That is less than $20 a head.One estimate I was given was that up until this weekend between 4,000 and 5,000 domestic US horses were disappearing over the boarder in any given week. The question remains if they arent going over the boarder what happens to them now? Because of lack of resources or foster care only about 10% of those animals were able to be saved through rescue in any given year.

 I have a contact in the  industry that follows the trends.  His business is auctioneer and encompasses all levels of the market but he is focused on  the specialty market. 

Tim Jennings is from the family of Auctioneers in Virginia that  goes at least 3 generations back.  Tim is in demand through out the region and country for his skills as auctioneer of Bloodstock and Top of the line AQHA horses. He also has the distinction of having been Auctioneer for the Chincoteague Pony sale for  a number of years.

I asked Tim to comment on the situation and this is his response in its entirety.:
“Supply and Demand.

I'm not surprised that the EU market was closed to US horses. I have heard rumors (unconfirmed) about feed lots for horses that were being established in some of the former Soviet bloc countries in Eastern Europe. IF that's the case, they can control their intake thereby eliminating any contamination from pharmaceuticals AND dramatically cut shipping costs to market. If the supply is sufficient from these commercial operations then there is no need to risk taking contaminated product from Canada and Mexico.
The biggest issue we face is the weakened demand at the mid to lower level of the market. Horses in this country are a luxury item. The costs to keep, maintain and compete with them have risen while disposable income has dried up. That being said, there seems to be a modest recovery underway at that level of the industry. This in another indicator that the recovery is picking up momentum and seems to be moving at the same pace as lowering unemployment, dropping foreclosures and rising housing starts. When the middle/working class sees substantial recovery, there should be a corresponding rebound a this level.
Supply is still dropping in most breeds and will continue to do so until demand rises. AQHA registrations for 2012 are at half of their peak level in 2006. The Jockey club projects 22,500 live foals in 2012 down from a peak of 36,000. Quality breeders who know their market can still succeed but they must be aware of what the markets want.
If you look at auction results at every level, you will see that "useful" to "exceptional" horses are selling quite well. Horses with no perceived use are still very difficult to sell.”

I am sharing this with you all not incite or anger people or to create more controversy but to bring to light what is actually going on and to hopefully provoke a discussion to come to some humane and realistic solutions that do not include the abandonment or whole sale killing of  the horses that are in jeopardy here.

Remember most of us have known for  several years that the EU was tightening this market. We actually tried to tell people and it seemed to fall on deaf ears. What is interesting is that without  slaughter  options low end horses are now at the same level of value as those same horse in the 1970s before the effects of the Wild Horse and Burro act was felt on the general population of the American domestic horse market.

Right now we need real solutions. This is a true opportunity for some, who will build businesses using horses and improve the economy without turning to the easy way out.  To some the easy way out is to kill all the those perceived to be excess. To kill all those healthy useful horses, to me would be a terrible  waste of life and history.  To me to create a situation where the less than perfect horses are dumped to starve and go un cared for is unthinkable. Marketing and education about specialty horses like the American Mustang needs to be ramped up and those horses need to be able to connect with the general population of the American public even in the cities.  Who will get creative?

So lets walk away from finger pointing and accusation. This situation needs real solutions now, not  rage or lip service. It is what it is! Now what are we going to do to make something out of this that saves horses, saves  heritage, saves people and builds a strong  economy for our horses that is bomb proof against more of the same? Please share and lets work together to fix this situation.

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Update:5pm Monday October 15th 2012:
The news has come through that the boarders were never completely closed; but that a certain slaughter house was turning away horses because of possible inaccurate and incomplete paper work required by the EU for the resale and importation of the horses. Rather than get caught over the boarder with load after load of  horses and be stuck with them, it is believed the transporters may have ceased  carrying until it was sorted out. According to one report from Billings Montana, their sales are up and doing fine. All sales scheduled will be held as planned. From Pennsylvania the new shipments will be delayed until tomorrow. The point here is  that the market for horses is very fragile and the low-end horses are still very much at risk. This is a wake up call for anyone and every one dealing with horses at the moderate and low end of the market, be they rescues, riding schools, private owners. The potential for a lot of abandoned horses is still very much as real a threat as that which comes from horses being purchased and shipped to slaughter for consumption in Europe. 
If the EU through Canada and Russia through Mexico pull the plug we could see surplus numbers too great to deal with.

From my vantage point as an advocate for horses in general and a advocate for mustangs in specific this is a very bad situation and we need to come up with some better opportunities and solutions fast. If you would like to share Ideas please email me. Thanks ~Linda