Deals, delays, and embracing the digital: Proposals to slow the foal crop decline

Cover image courtesy of The Image Is Everything

Reports of covering numbers falling far short of expectations this season painted a dire picture for the future of race fields in yesterday’s edition, but the season is far from over and there is still time to change trajectory.

Breeding is not an isolated part of the industry, so what changes we make have to address and intervene at all points of the cycle if we want to have a real impact.

The root causes

Thoroughbred Breeders Australia and the AgriFutures Thoroughbred Horses program have just launched a project that will, over the next few months, examine the factors directly influencing the continued decline in the foal crop.

“There is no question that breeders are operating in a challenging economic environment,” said Andrew Hore-Lacy, Thoroughbred Breeders Australia and Aushorse CEO. “Rising production costs, fuel, fertiliser and broader cost-of-living pressures are influencing breeding decisions, and we have to recognise those realities.

“Through our work with AgriFutures and the researchers examining Australia's declining foal crop, we want to better understand not only the factors contributing to this decline, but what is needed to ensure the long-term sustainability of our industry.

“That means considering two equally important questions: are we producing enough horses to meet the future needs of racing, and are we retaining the people, businesses, skills and investment needed to keep producing them?”

Hore-Lacy also emphasised that there is a difference between breeders choosing to sit the season out and those leaving the industry altogether, and how those two decisions are responded to are quite different.

“A breeder who doesn't cover a mare this year but returns in two years' time is a success story, not a lost statistic,” he said. “We need to understand how we keep those people engaged and make it easier for them to increase their participation when conditions improve.

“Importantly, this is not a challenge for the breeding sector to address in isolation. A sustainable breeding industry underpins the entire thoroughbred racing ecosystem, and declining foal numbers have significant implications for future race fields, wagering and the long-term viability of racing.”

Further to that work, TBA and AgriFutures also have projects underway addressing a range of different areas within the industry’s lifecycle that experience different pressures.

Currently underway are a number of projects concerning optimising the number of horses we get to the track and their value on the way there, by improving the way we assess radiographic lesions and endoscopy results, and examining links between what we see in those images and how horses actually perform on the track.

Another project currently in motion is looking at how to increase demand for retired Thoroughbreds across the rest of the equestrian world.

“Understanding these relationships can help inform better breeding, management and purchasing decisions, with the broader objective of improving outcomes for the horses we produce,” Hore-Lacy said.

“When we consider the long-term sustainability of the industry, it's not simply about how many foals are born. It's also about understanding how we can maximise their opportunities to successfully transition into racing and have productive racing careers.”

Hore-Lacy also stressed the importance of a united front when addressing the decline.

“The racing industry cannot afford to treat this as a problem for breeders alone, when the consequences will ultimately be felt across every racing jurisdiction,” he said. “We need a coordinated, whole-of-industry response that considers not only how we sustain the supply of horses, but how we retain the people who make that supply possible.”

Getting them in the door

Most commercial studs spoken to by TTR are well aware of the role they play in keeping breeders in the game, and now more than ever, they are working to ensure that the invitation in the door is as appealing as possible.

Both Widden Stud and Swettenham Stud have partnered with G1 Goldmine and Stallion Match to offer special discounted rates for mares who are rated as either 20/20 or Perfect Matches for their stallions. The discounts range from 5% to 50% off the listed service fee, depending on the sire.

“Putting an offer on those mares (whose pedigree matches our stallions) made sense to us,” said Widden’s Matt Comerford. “If a breeder has done the homework and the match is there, we want that mare in the book.”

“Every service fee discount I have seen in 20 years in this industry was negotiated by a person,” said G1 Goldmine’s Managing Director Matthew Ennis, speaking at the time of Widden’s partnership announcement. “This is the first on our platform where the pairing of mare and stallion decides.”

For the smaller breeder or the breeder earlier in their career with fewer connections, a simple search can uncover a discount that might otherwise be difficult to obtain.

Four of Yulong’s stallions are offered with a breed back bonus, where breeders paying a full price nomination in 2026 will receive a bonus nomination for either 2027 and 2028, while several other Hunter Valley studs have offered variations on the traditional foal share scheme where breeders retain 100% of the first $10,000 of sale proceeds, taking away some of the risk involved in selling horses at lower end of the spectrum.

The main aspect of every offer is the understanding that everyone has to be in this together. There has always been negotiations, as Ennis highlighted, but the need for collaboration is greater than ever.

Changing perceptions

The cost of the service is just one element of the story for breeders. While there will always be certain fixed overheads in breeding and rearing horses, there are areas where there is the capacity to reduce the costs for owners.

Hamish Esplin, president of Thoroughbred Breeders NSW, sees an area ripe with the capacity to make savings in the preparation of yearlings for sale. In Duncan Grimley’s breakdown of costs for TTR last year, he estimated that nearly 25% of the costs from conception to sales ring were directly associated with the yearling preparation and sale itself.

Esplin acknowledged the reality that not every yearling is going to be worth taking to a public auction, particularly travelling long distances to get there, and he pointed to the advent of the digital sale as the way forward for selling youngstock at the lower end of the scale.

“At a certain level, that amount of investment (to get to a physical sale) becomes inefficient,” he said.

Both major sales companies offer yearlings and weanlings on their sales platforms, but Esplin said that the work needed to be done by all parties involved to elevate the perception of these sales to be similar to those of a live auction for a yearling.

“Like all things, it will take time to build people’s confidence in purchasing through those forums, but now it is the only way really to buy a tried horse,” he said. “The vast majority of broodmares are now sold online. Why can’t that apply to other types of horses?

“We just aren’t being creative enough (with how we market yearlings), because we have self-imposed limitations on how we think yearlings should be sold.”

Esplin believes that if people could adapt the way that they think about buying horses, then the digital sale becomes a very appealing platform, particularly with buyers who have less money to spend.

“Why do you need to have a full set of x-rays for horses selling at that level? Why do you need to prep them for 10 weeks? They are most of the cost,” he said. “I am not sure they are all necessary. What we should be doing more of is incentivising people who breed horses that are less valuable to do so knowing it won’t cost them a fortune if they want to sell.”

Arrowfield Stud is one vendor who has embraced the model already; their annual yearling sale through bloodstockauction.com concluded on Tuesday night, where the 15 yearlings offered all came with the chance of a $25,000 bonus if the horse goes on to win a juvenile metropolitan race.

The 15 lots averaged around $10,000 each - but achieved from an entry fee of $385, with no radiographs or pre-sale scope, no transport, and minimal preparation.

“The changing shape of our foal crop and our demographics has meant that now a larger percentage of yearlings are being offered for sale, as opposed to privately traded or bred to race,” Esplin said.

“It is absurd that we only offer two options in that sphere, either transport them interstate for a sale or put them online where it is deemed inferior. It’s completely the wrong way round.

“You can’t expect people to get involved and to breed the cheaper yearlings for the buyers who don’t want to spend that kind of money if we don’t offer them an appropriate way to get out.”

It’s not over until the season’s over

The result of this season is not yet a foregone conclusion, and while traditionally there has been somewhat of a stigma around later foals, there is plenty of evidence that they are not so different from their older peer group.

It is hard to become more of a headline act than nine-time Group 1 winner Anamoe was on the racetrack, and the November 16 foal has been just as attractive to breeders and buyers as his first crops of foals make it to the sales ring.

The Horse Of The Year debuted over a month before his second birthday, and won the Listed Merson Cooper Stakes two days before officially turning two. His G1 Caulfield Guineas triumph - where the runner-up was two months his senior - was over a month before his third birthday as well.

The goal of producing a Horse Of The Year may seem like a pipedream to the average breeder, but every black-type and metropolitan meeting hammers home reminders that foals born later in the season are not as disadvantaged as one might first assume.

From the 158 stakes races run in Australia this season up to October 25, there have been 132 individual winners, 42 of whom were born in September, 36 in October, six in November, and one in December.

The standouts amongst the crowd include last weekend’s G1 Cox Plate hero Cosmic Crusader (NZ) (Maurice {Jpn}), who was born on November 2, recent G1 Flight Stakes victress Global Goal (Pinatubo {Ire}), born on October 15, and G1 Sir Rupert Clarke Stakes winner Angel Capital (Harry Angel {Ire}), born on October 28.

Precocity can also be found in the early stakes winners this season; G1 Golden Slipper Stakes winner Guest House (Home Affairs) and fellow juvenile stakes winners Paradoxium (Extreme Choice) and Chilly Girl (Trapeze Artist) were all born in October, as was Group 2-winning 2-year-old and multiple Group 1 winner Beiwacht (Bivouac).

These solutions are just a subsection of the angles we can use to tackle this issue. What we do with the information and ideas before us will determine the shape of not just this season, but the shape of the industry's future.