by Dave Astar
It’s a frequent question that has been asked in Minnesota since Y2K. From the days when racing economic possibilities were at their highest and we Minnesota breeders bred 411 mares during the 2005 breeding season, to the point where possibilities dimmed and we only bred 171 mares in 2011, the breeding environment has constantly changed.
Not surprisingly, the answer to the “breeding question” has not always been the same simply because the facts about the benefits of breeding Thoroughbreds in Minnesota have been shifting. Today however, is a day that I think a few folks just might benefit from an old horseman’s view of the current Minnesota Thoroughbred breeding environment.
Of course, the thrill and excitement of seeing our breeding decisions come to fruition on the racetrack will always be a primary motivation for me and many other dedicated breeders. There is simply nothing like seeing our babies running down the stretch at Canterbury Park for the first time. We watch them from that first day on the racetrack until the day they retire from racing, and either move into the Minnesota Retired Racehorse Program, Canter Minnesota or are snapped up by smart owners who take them on to other careers in the many equine disciplines our well trained Minnesota Thoroughbreds are qualified for.
Beyond the emotional attachment we breeders have to our horses and Thoroughbred breeding, the Minnesota breeding economics have also shifted to make breeding a rewarding experience in many other ways. To understand these breeding benefits we need to go beyond the emotions and understand Thoroughbred breeding economic value.
Breeding economic value is realized when we either sell or race our foals. If we sell them, we not only get the sale price but we also receive “Bonuses” which are earned if the foals we bred earn purses in Minnesota. If we do not sell our foals and keep them for racing, we earn those same bonuses, plus of course the race purse earnings. Subsequently, our breeding revenue boils down to three simple things; Racing Purses, Bonuses, and Sale Prices. These items are interrelated and each one has dramatically improved, or should reasonably be predicted to improve in my view.
Racing Purses have increased dramatically since the advent of the 2012 Mystic Lake marketing agreement. In fact, no other state in the union has seen the 117.9% increase in Minnesota purses we have realized since 2011. Minnesota bred maidens will run for a $32,000 purse in 2016, versus the $18,500 they ran for in 2011. Our Minnesota State Bred Stakes races, like the Oaks, Derby, Futurity and Debutante, are now each at $85,000 purse levels! The restricted MTA Stallion Auction Stakes race is now up to $55,000 and an entirely new $40,000 restricted race was added to the book in 2016 for MTA sale graduates to be run on the same day as the Minnesota Derby in July.
Bonuses for breeders have also increased, and there are ongoing serious efforts to find other added sources of bonus revenue. In 2015, mare owners received a Minnesota Breeder’s Fund check in December. That check equaled 8.9% of the eligible purses earned by their bred horses, and is more than double the percentage bonus of eligible purses we breeders received just 3 years ago! If we keep our foals and race them, we basically get this 8.9% bonus for eligible purses on top of our standard race purse earnings. If we sell our foals, this bonus is just like an annuity because the checks just keep coming in year after year, as long as the foals continue to race and earn eligible purses.
The Minnesota Thoroughbred Association has also just announced that the breeder of each MN-bred yearling, consigned to the MTA 2016 Yearling Sale that sells to a new owner during the auction, will receive a Yearling Sale Graduate Breeder’s Bonus when the MTA Sales Grad breaks its maiden in a Maiden Special Weight or Allowance race. The bonus will be paid to us breeders within 30 days of the horse breaking its maiden at Canterbury Park. Minnesota “CONCEIVED AND FOALED” MTA Sale Grads will receive a $2,000 bonus. Minnesota-bred “FOALED” MTA Sale Grads will receive a $1,000 bonus.
After reviewing the Jockey Club State Fact Book, I found that their data indicate that the average Minnesota bred horse earned $7,637 in 2011. That earnings number jumped up to $13,569 in 2015, a 77.7% increase in average foal earnings. The actual Minnesota breeder’s fund payments as a percentage of earnings were only 3.9% in 2012, versus the 8.9% they were in 2015. When the average earnings, higher purses, new races, maiden race bonuses and percentage payments increases are combined, the “maximum” future economic value of Minnesota foals is extraordinary.
Sale Prices should also rise in 2016. In 2011 the average MTA yearling sale price was only $6,577. In the combined years of 2014 and 2015, the average sale price jumped up to $9,077. While this 38% increase in price was nice to see, many Minnesota breeders expected to see price increases similar to the average purse earning increases. The good news is that the MTA recently announced changes that should present the very opportunity for price appreciation breeders have asked for.
The 2016 Minnesota Thoroughbred Association sale is moving to the very professional and new state of the art Canterbury Park expo center. This center contains all of the technology and amenities Thoroughbred buyers expect in a professional sales environment. Canterbury also brings a wealth of marketing leverage, consistent with Canterbury’s exceptional average race day attendance and their public company professional marketing power. This should bring more qualified buyers to the auction, and I would expect them to be much more inclined to understand the higher purse earning power Minnesota’s yearling Thoroughbred crop represents. When the previously mentioned added races and improved purses are added to this equation, buyers will logically infer much higher long term value.
So what do some of the top breeders of Minnesota horses think about breeding in Minnesota?
Dean and Teresa Benson, the owners of Wood-Mere Farm, have been one of the top breeders and sellers of yearlings in Minnesota for many years. When asked about their impressions of the current breeding environment they said, “Since Mystic Lake added money into Canterbury’s purses, we’ve found interest in foaling mares in Minnesota, and purchasing MN breds, has increased much more than we had seen in many years. Our clients have graded stake winners that they have shipped to MN for the big stakes offered. We have been receiving mares in for foaling from eight states, and ours and our client’s MN bred bloodstock are selling privately as well as at the MTA Yearling Sale. So, clearly, where there’s money to be earned, the business seems to follow.”
Other top Minnesota Breeders like Rick and Joyce Osborne of Osborne Farm, said, “Now, after the Sampson family and Canterbury Park have done a tremendous job to promote Thoroughbred racing in Minnesota, it is good to hear that improvements to the breeding program in the State are becoming a priority. With positive steps being taken and new incentives being offered, we are already seeing earlier interest in breeding and have had more inquiries about purchasing Minnesota breds than in past years. We are looking forward to a productive breeding season this spring and a profitable yearling sale this summer.”
Lisa Duoos of Dove Hill Farm is another Top Minnesota Breeder. When asked about breeding prospects she said, “”With many years left with the agreement between Canterbury and Mystic Lake, there hasn’t been a better time to be involved in the Minnesota Thoroughbred breeding industry. The opportunity we have to earn breeder award monies is an amazing way to end the racing season!”
Okay so I know I get into percentages and data way too much but let’s try to get this straight! Minnesota has seen bigger purse increases than any state, average earnings are way up, breeders fund bonus payment percentages are more than double what they were 3 years ago, we will get meaningful checks for the first maiden or allowance win, there’s a new race worth $40,000 just for MTA sale grads, yearling sale prices should go up because the MTA auction will be co-marketed with Canterbury, the auction will be held in a great professional buying environment, there’s more to come as people pursue other sources of breeder revenue, and top breeders are excited again about breeding prospects in Minnesota. Hum????
Simply put, this old horseman thinks the Minnesota Thoroughbred breeding environment has never been better and all three key elements of economic value including prices, bonuses and purses, have “factually” increased. Then again, let’s never forget about those thrills of that baby flying down the stretch for the first time. For some of us, that itself is absolutely priceless!
Anyway, Good Luck and Good Breeding to all.
Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper. (Astar Thoroughbreds, LLC., www.astarthor.com)