The Horse Industry & Today's Economy

For June 15th, 2008

By April Reeves

Every industry keeps an eye on the economy. Some actually make huge decisions minute by minute, based on a single analyst’s word.

Trainers, breeders, boarding facilities and general riders don’t need to be fanatical about the economy like Wall Street. But there are statistics you need to watch, as they tell a story about ‘possible’ future events. Forewarned is forearmed. Proactive is better than reactive.

Even though the American economy is in a downturn, Americans whose household income is $100,000 and over have been growing. It now makes up 19 percent of all US households (Nielsen analysis). This is a 23 percent increase from a decade ago (the median income is $49,000). 22 million households now earn over $100,000.

There are more higher-earning Americans than ever, signaling a growing opportunity for many business sectors to capitalize on reaching this market. This group controls $22 trillion in assets. (Marketing VOX, May 23, 2008).

Many of these affluent people are living in areas not normally occupied by wealth, such as Juneau/Alaska, Torrington/CT, Easton/MD. These small centers attract baby boomers and retirees.

Another statistic I predicted about 7 years ago: the income to ages 30 to 50 would increase, not by job status but by inheritance. Many boomers are leaving behind small to large fortunes to their children. These people will use that extra money to purchase larger homes, cars and something they have always wanted but couldn’t afford (horses?).

What does this mean to the Horse Industry?

For those who train and teach, new markets may be on the verge of opening up. Although most of the statistics are boomers and retirees, you need to look at the overall rising wealth of America. This means new monies for those with children (parents aged 27 to 50). We have been witnessing this over the last 5 years already.

For manufacturers and resellers, these could be good times. New product lines may have greater chances of ‘sticking’. Also, as you read further down, things may only get better, and those opening doors at the ground level have the advantage.

All this bodes well for Breeders. Opportunities exist for organically increasing good quality horses, as they become the recreation of choice for those looking for alternatives to their leisure activities. Quality breeders can look forward to either increases in earlier sales or higher prices (or both). However, those breeding just for the sake of breeding (‘I have a mare’ syndrome) will never capture any rise in the market. Poorly bred horses are always unwanted in any market (that’s another article).