Market Contraction Affects Stallions at All Levels

With the number of mares bred and active stallions continuing to track downward, as shown in the recently released 2018 Breeding Statistics from The Jockey Club, BloodHorse MarketWatch wondered how much this trend was affecting the top of the market.

The turn of the century came with lingering concerns about overproduction. While the foal crop of 37,755 in 2000 was far less than the peak of 51,286 seen in 1986, it was still higher than it had been through the late 1990s. The foal crop would gradually eke upward through the early 2000s—in part—because of rising averages in the commercial market, particularly at the yearlings sales whose collective average jump by more than 10% in both 2003 and 2004.

Then came the Great Recession in 2008 and forced a market correction. From 2000-18, the North American foal crop has dropped 43%, the number of active stallions is down 64%, and the number of mares bred is down 49%. As breeders rode through the economic turmoil, they held onto the hope that the least valuable horses would leave the market and an overall rise in quality would produce higher premium prices at auction down the road. Their hope has been realized. Using the yearling market as our barometer, this year's overall North American average is tracking at $100,800, up 59% from the average five years ago.

So when we see the foal crop, number of stallions, and mares bred continue to decline, are we seeing any changes among the most active stallions or are we merely continuing to shed the least valuable breeding stock? In short, both are happening.

On the stallion side, the most desirable stallions as determined by the number of mares they've bred has remained relatively stable since 2000, but the number of mares this group has been breeding has increased substantially. 

For the 2000 breeding season, 84 stallions were reported with book sizes of 100 or more mares. The total number of mares bred by these stallions (9,773) represented 15% of the total mares bred (64,337) that year. For the 2018 breeding season, 93 stallions bred books of 100 or mores—up slightly from 91 during the 2017 breeding season but down from 101 stallions in 2016. The 93 stallions, however, bred 13,177 mares, which represented 41% of the total mares bred (32,508) in 2018.

Casting the net a bit wider, the number of stallions bred to at least 20 mares in 2018 equaled 388, which is 56% fewer stallions than the 886 stallions that fit this category for the 2000 breeding season. So while we are seeing a decline among the most active stallions, these stallions are covering more mares. The stallions with books of at least 20 mares collectively bred 25,882 mares in 2018, which represented 80% of all North American mares bred.

Meanwhile, we also are seeing a steady decline in stallions covering the smallest books. In 2000, the number of stallions breeding nine mares or less totaled 3,006 and accounted for 16% of all mares bred (10,579). In 2018, this subset of stallions equaled 1,018 and the mares they bred accounted for 11% of all mares bred. The number of stallions that bred five or fewer mares dropped more substantially from 2,365 in 2000 to 796 in 2018, and the number of stallions that bred at least one mare but did not sire any live foals the following year dropped from 1,016 for the 2001 foaling year to 280 for the 2019 foaling year. Clearly, these are stallions owned by people breeding their own mares, but even the appetite for this homegrown approach seems to be waning.

The stallions breeding nine or few mares in 2018 still accounted for 2,866 foals in 2019, or about 14% of the total foal crop. Odds are most of these foals are being bred to race so as they continue to trickle out of the market, racing secretaries will face ever tougher decisions about filling race cards and keeping field size up in order to maintain a viable product.