Last year saw a significant increase in sales prices achieved across the different age brackets of sport horses at public auctions. Undoubtedly the dedicated work the sales companies are doing regarding the elite sales is working.

In 2015, the sector witnessed record prices in the public domain with Dougie Douglas (ISH) being sold for €1. 4 million and a foal by Elvis Ter Putte sold for €22,000. Even without accounting for the elite sales, average prices were up marginally and one could possibly attribute the strength of the sterling as having been a contributing factor.

As we head into the 2016 breeding and sales seasons, we must be mindful that the marketplace is constantly seeking quality animals that are fit for purpose. The marketplace is very competitive, particularly the middle market. Therefore, it is vital to take stock of the costs of production and what the potential financial returns are, in order to make informed decisions regarding breeding and meeting market requirements.

Costs of production

Many of us are breeding horses with the uncalculated assumption that we might make a profit for the time and money invested, but how many of us are actually calculating exactly how much we are spending, and what our margins are?

Asking how much it costs to breed and produce a foal is a bit like asking how long is a piece of string, as there are so many variables. Each situation is unique, but there are a number of factors that are common to all. The costs shown in tables 1 and 2 are conservative and exclude stud fee, repayments on fixed assets, labour, training fees and other associated costs and assume reasonable fertility. Adding together the total for the mare and foal, the average cost of getting your foal to weanling is €1,651, and it’s important to note that this does not include fee.

The 2012 UCD report Economic contribution of the sport horse industry to the Irish economy states that 73% of its respondents to a survey outlined that they sold their horses privately. The average price recorded for all horses sold when all survey responses were recorded was €4,755.

Some 27% of horses are sold through the auction houses, namely Cavan Equestrian Centre and Goresbridge Horse sales. The results of these sales are not completely representation of the industry; however, we can learn some important points about the current climate from them.

The marketplace

From tables 3 and 4, it is clear that elite sales are significantly improving the returns for breeders whose stocks are selected for this medium of marketing and sale. It is important to note that elite sales are only as good as the product they have on offer for sale.

The trend clearly shows that if you breed what the market requires it is prepared to financially reward you.

2015 Overview analysis

By not including the elite sales you can see from table 9 that the average price across all age categories is significantly lower, and these horses failed to make a financial return for their owners. The law of diminishing returns sets in particularly when you add costs of breaking and producing horses to four-year-old and over.

The elite sales have contributed significantly in the rise of the average price and that of the top 20%. These horses most likely would have been sold privately in the past; but because of the ongoing success of the elite sales, vendors are now opting more readily to sell at public auction, where animals meet selection criteria

It is clear from these figures that the marketplace is saying to breeders loud and clear: we will financially reward those who are breeding and producing for purpose. Those who sold in the top 20% received financial return for their endeavours.

Those who did not fall into this bracket most likely lost money and need to critically appraise their mares and/or choice of sires for future breeding plans along with how their horses are produced.